Central Excise - Classification of cotton fabrics treated with resin, known as 'Spider Cloth' in the new tariff - Reconsideration of Tariff Advice 47/84, dated 29-9-1984 - Matter regarding - Central Excise - 3/89

Central Excise - Classification of cotton fabrics treated with resin, known as 'Spider Cloth' in the new tariff - Reconsideration of Tariff Advice 47/84, dated 29-9-1984 - Matter regarding Circular No. 3/89 Dated 6-4-1989 [From F. No. 59/12/87-CX.1] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Classification of cotton fabrics treated with resin, known as 'Spider Cloth' in the new tariff - Reconsideration of Tariff Advice 47/84, dated 29-9-1984 - Matter regarding. A doubt has been raised whether 'Spiders' and 'Spider Cloth' can be treated as excisable. 2. A Tariff Advice No. 47/84, dated 29-9-1984 was issued according to which 'spider cloth' was not excisable on the ground that the product was not fully manufactured and was only an intermediate. Now doubts have been expressed by the field formations regarding the classification of similar products in the light of the New Central Excise Tariff. 3. The matter has been examined in the Board in consultation with the Chief Chemist whether the said products would still remain non-excisable as per Tariff Advice No. 47/84, dated 29-9-1984 despite the changes that have taken place in the Central Excise Tariff with the introduction of Note 9 to Section XI of the present Central Excise Tariff which states that the expression 'impregnated' includes 'dipped'. The said Tariff Advice was issued on the consideration that spider cloth was not fully manufactured and it was only an intermediate product with a very short shelf-life and was not marketable. It has since been reported that the shelf-life of the product can be increased by using less cured phenolic resin and the product is also used as a moulding substance in the manufacture of Hand Guard for rifles, Gear blanks, Caster wheel for trolley etc. As the shelf-life can be increased by using less cured phenolic resin, it is possible to market the product so cured in far off places. These treated fabrics are cut into pieces according to size and shape of the article to be moulded, assembled one above another in a die and compressed under heat and pressure in a hydraulic Press. The spider cloth is also known to be despatched to the customers in the immediate vicinity. 4. Under these circumstances these products cannot be considered on par with the 'Spider Cloth' dealt with in the Tariff Advice No. 47/84, dated 29-9-1984 and are excisable products. These are only prepregs which are defined to be "any resin treated on a reinforcing web and sold to the purchaser in an uncurred form. The user of any prepreg can then mould into his own laminated structure. The resin on a prepreg may be 'B' staged, which means partly cured to non or semitacky state or in certain resin systems. The resin may normally be a solid at room temperature". These fabrics are stated to be stored until needed for moulding or laminating operations. In the case of spider cloth, the partial curing to increase the shelf-life of the impregnated cloth is not said to be done. Therefore, the Chief Chemist opined that, if there is any evidence that such treatment is given to spider cloth also, then it is excisable as impregnated cloth. 5. It is noted that "Spiders" are textile articles/products which are suitable for industrial use and hence merit classification under heading No. 59.09 of the Central Excise Tariff. However, each case needs to be decided on merits based on facts, so far as 'spider cloth' and "cloth treated with resin" are concerned. If necessary samples may be got tested from chemical examiners. 6. A copy of the Chief Chemist's opinion in this regard is also enclosed for guidance. CHIEF CHEMIST'S OPINION The Point for consideration is whether "Spider Cloth" would still remain non-excisable as per T.A. 47/84, dated 29-9-1984, despite the changes that have taken place in the C.E. Tariff. With the introduction of note 9, Section XI of the present CET, which states that the expression "impregnated" includes "dipped", it is felt that "Spider Cloth" would not more be non-excisable. It is seen from the Tariff Advice that Spider Cloth was considered as non-excisable since the product was not fully manufactured, and it was only an intermediate product with a very short shelf life and was not marketable. The position regarding excisability of such a product cannot change with the changes that take place in the Tariff explaining the scope of the terms and heading. Therefore, I am of the opinion that the note 9 to Chapter XI does not alter the stand taken in the Tariff Advice. "Spider" made from the spider cloth would merit consideration as a textile product and article of a kind suitable for industrial use. Regarding the "Cotton fabrics treated with resin" of M/s. Abelin Polymers, Nasik, it is seen from the letter dated 28-4-1987 of the Collector, Aurangabad that these products are used as moulding substances, with cotton fabrics mainly as filler, in the manufacture of Hand Guard for rifles, Gear blanks, castor wheel for trolley etc. It is stated that the shelf life which is shorter can be increased by using less cured phenolic resin, thereby making it possible to market in far off places. These fabrics are cut into pieces according to the size and shape of the article to be moulded, assembled one above another in a die and compressed under heat and pressure in a hydraulic press. These products are also known to be despatched to the customers in the immediate vicinity. Under the circumstances these products cannot be considered on par with the Spider both dealt with in the T.A. 47/84 and are excisable products. These are only prepregs which are defined to be "any resin treated on a reinforcing web and sold to the purchaser in a incurred form, the user of any prepreg can then moulds into his own laminated structure. The user of any prepreg can then moulds into his own laminated structure. The resin on a prepreg may be "B" stage which means partly cured to a non or semitacky state, or in certain resin systems. The resin may normally be a solid at room temperature". These are stated to be stored until needed for a moulding or laminating operations. In the case of spider cloth, the partial curing to increase the shelf life of the impregnated clothb is not said to be done. Therefore, this is not on par with the product of M/s. Abelin Polymers, Nasik. If there is any evidence that such treatment is given to spider cloth also, only then it is excisable.